Romney as Governor

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    Fraser Bullock   Former COO, Salt Lake Olympics

    (Text only) A former Bain Capital partner, he was living in Utah when Mitt Romney took the helm of the scandal-plagued Olympics. Romney convinced Bullock to join him as COO and together they saw the games out of a $400 million hole. This is an edited transcript of an interview conducted on July 19, 2012.

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    In early 2002, the buzz starts about "What's Mitt going to do next?" Talk to me about the conversations that he had with you about that and what he was thinking.

    I remember about a year before the Games talking to Mitt and saying, "Well, what are we going to do, because we fire everybody, including ourselves, at the end of the Olympics?" And he said: "Well, maybe I'll get back into the private equity business and start a smaller fund. I'm not quite sure." But then he said, "Let's just put our heads down, let's work hard, get this right, and the future will take care of itself." And so he had no definitive plans a year out from the Games.

    But then fortuitously, I think about a month or two before our Games were held, the situation changed in Massachusetts, where a door came open for him that he didn't expect to be able to run for governor. And so really that last month he started thinking about, "Wow, what do I do next?" We were all thinking about that: "What do I do next?" And during that period of time he did decide to run for governor of Massachusetts. But prior to that, he was just focused on the Olympics, doing them right, and the future would take care of itself.

    And why do you think he chose to go back into politics instead of going back into private equity? He had just had this difficult period and this great success, and Bain was waiting for him, yet he went in another direction. Why?

    I think what happened to Mitt during the Olympics is he recognized that his business career had been very successful and enabled him to be of service. And so at that point forward he's just trying to be of service to his community, his country, his family, and that's all his energy and focus. So going back into private equity, he didn't need to make any more money or anything. He certainly could have. But for him what was important was giving back and just being of service in any way that he could. ...

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    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    ... While he's being wooed to come to Massachusetts, and while you're receiving all those calls, there's a lot of calls in Utah, too, that say: "Hey, you've got a house. Ann is feeling better, living out here. Maybe you should stay out in Utah." What makes him come back to Massachusetts?

    I think after three years -- I never had this discussion with him, but I think they were really glad to come home. This was home, Boston, Belmont, for the Romneys. They had lived there ever since he had come out to go to Harvard Law School and Harvard Business School. They didn't build Bain Capital on Wall Street; they built it here in Boston. ...

    And I don't think Mitt had any intention after the Olympics of running for office. I think he was probably looking forward to going back to Bain Capital for a while. And then this situation here in Massachusetts was so dire, and we had a really wonderful governor, but she was in a really tough position. She couldn't have got re-elected. All our pollings showed that her unfavorables had gone through the roof. She was in a tough situation. I mean, Gov. [Jane] Swift, while she -- she was acting governor. The governor who was elected, Paul Cellucci, had been appointed ambassador to Canada by President Bush, so she took over. She was pregnant with twins. She lived way out in Western Massachusetts, up in the corner of the state, so she had a three-hour commute into Boston, each way, every day, because we don't have a governor's mansion in Massachusetts.

    We'd had the dotcom bubble burst, just one bad thing after another that was affecting our economy. Tax revenues were going down. The legislature was being really ornery to her. She was just in a tough situation. And she's a terrific person, but it just didn't work out for her.

    So Mitt didn't want to step on her, wanted her to make her own decision. But more and more people were coming out of the woodwork saying, "Is there any way Mitt would run? Is there any way Mitt would come back and do this?," even as the Olympics were going on. And then once they ended, it just turned into a crescendo. ...

    And we started to pick up vibes from the Swift people, that she thought that maybe Mitt would run, maybe she wouldn't run. And we didn't want a primary, and we didn't really want to take her on.

    So Mitt got back. In that time, I was trying to line up a team, get folks that we thought would make a good team for Mitt. And everybody was really enthusiastic. And then he came back from the Paralympics on a Sunday, and on Tuesday she announced that she wasn't going to run for election. ...

    And then we're at Mitt's house -- we didn't have a campaign headquarters; we didn't have anything -- a bunch of us, and he said, "Well, let's go for it." So he and Ann and a couple of his sons, walked out to the end of the driveway. We called the TV stations. Within 15 minutes everybody was there. And Mitt said: " I'm going to do it. I'm going to go for it." And announced that he was going to run for governor. ...

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    Mitt and Ann

    Tom Stemberg   Founder of Staples, Inc.

    (Text only) Tom Stemberg founded Staples and served as CEO for 16 years. Under Mitt Romney, Bain Capital helped finance the first Staples, which opened in Brighton, Mass. in 1986. Staples was one of Bain’s earliest investments. This is an edited transcript of an interview conducted on June 15, 2012.

    Read the full interview »

    ... What makes him decide to go for governor, do you think, and how did you help him talk about it?

    I think a whole bunch of friends of his inside and outside politics -- and I of course was outside politics -- told him that we thought the state needed him and his leadership to right the ship.

    The state was running huge deficits with no end in sight, and I was out at the Olympics when Mitt was running the Olympics and saw him out there and gave him my pitch. And Mitt did his normal smile, listened: "Gosh, you know, we've got a Republican governor. I can't imagine going back there, Tom. I've been so tied up with the Olympics. I've got to think of what's going forward." So I didn't get very far at all.

    Then I grabbed Ann, and I give her my same pitch. And she goes: "You're right. And I've been telling him the same thing. He's got to go for this, and you really got to work on him." So she clearly thought the state needed Mitt, and she was going to get him to do it.

    Is she that capable of pushing him around a little bit for something that really matters?

    Nobody pushes Mitt Romney around. Having said that, if there's one person whom he will almost always defer to, it's Ann Romney. Mitt is extraordinarily parsimonious in almost everything he does of charity. I'll never forget at a Staples board meeting over in Hamburg, [Germany]. Ann Romney comes back with this coat, this absolutely beautiful coat, and this is a Hamburg designer, and it was a huge price tag. And I looked at Mitt and says, "Mitt." He smiles. "It's Ann."

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    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    What did he have in mind? What did he want to do? What did he think he could do for Massachusetts at that moment? Because I get this kind of white-knight feeling about the guy, that there's a tendency for him to say: "All right, I'm in public service now. I've made my money, and I'm going to save things." Certainly that’s true with the Olympics, so was it true also of Massachusetts?

    It's more fix things, I think, than anything else. There's the bigger the problem, the tougher it is, the tougher the going is, the more Mitt likes it, the more challenge. For instance, at Bain Capital, they didn't do dotcoms; they did steel companies. Everybody said: "There's no steel industry in America. You can't invest in steel." Well, that's what they did. The tougher the challenge, the more he likes it.

    And could there be any more of a challenge in Massachusetts than to have the unemployment rate going up, state facing a huge deficit, the Democrats clamoring "We've got to raise taxes," which of course would just retard things? You don't raise taxes in the middle of an economic downturn. So all of those types of things are really appealing to Mitt; he just loves those types of challenges and to be able to make things better for people. ...

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    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    Let's go back to 2002. He had just come off an incredibly successful Olympics. He very easily could have gone back to re-entering the business world and been successful there. You have your first meetings with him. Why does he tell you he wants to run for governor?

    Well, I think Mitt made the decision in 1999 when he departed Bain Capital for the Olympics that after that point he was going to devote himself to public service. And having finished with the Olympics and having staged one of the most successful Games ever, he had a choice to make about his future. And there were people back here in Massachusetts who were encouraging him to run for office.

    And you have to transport yourself back in time to 2002, and the situation here was not unlike the situation the country faces nationally. We had a state that was in recession. We were losing thousands of jobs every month. The budget was seriously out of balance by about $3 billion. And the voters were looking for someone who could come in with a strong set of management skills and turn things around.

    Massachusetts is not a place that is hospitable to Republicans, and the political culture here is not a place that is hospitable to outsiders, which makes Mitt Romney's election in 2002 that much more remarkable, because it not only represented a success for a Republican Party that represents 11 percent of the voters here, but it also brought into office a person who came from outside the political culture. He did not come up from the normal ladders of success in politics; he came in from the private sector. And it was exactly what the state needed at that moment in its history.

    And from his side, when he's talking to you, what does he tell you? Why does he think he's the right person to come in and fix it? What are those conversations about?

    Well, you know, after his election, he gathered his senior team, his Cabinet, the people he had selected to serve with him at the Parker House in Boston. And I remember, it was a snowy morning in December, and the governor said that: "Look, I don't do this because I'm interested in achieving power for myself. Power is not an end to me; it is simply a means to do good things for people." And the way the governor defines success for himself is helping other people to be successful.

    And he knew at that time that we were at the high water mark: We had just won a statewide election in an overwhelmingly Democratic place. And he knew that over time as tough decisions were made, it would be down hill for us, but that eventually, with the passage of time, people would look back and recognize the wisdom of the course that we pursued. I think that is the case today.

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    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    He wins the governorship. No surprise to you?

    It was a tough campaign. The state treasurer, Shannon O'Brien, came out of it, beat all the other guys, was running on the "Let's make history; let's elect the first woman governor in Massachusetts history," because Jane Swift hadn't been elected. Had a pretty good record as a state legislator and then as the state treasurer. ...

    And it was close. Shannon was up with about a week to go. And then they had the last debate, and it was over at Suffolk Law, and Tim Russert -- the late, great Tim Russert -- came up to do the debate up here. But it was just one on one with Mitt and Shannon. And he won that debate, and he got tremendous momentum. And we were probably down four or five right before the debate, and then in the last eight days, because of the debate and Mitt's campaign strategy at the end, we were able to turn that around, and Mitt ended up winning by five.

    Why did he win the debate? What did he do that was so amazing?

    He was really straight on his answers. Russert was probably the best American debate moderator. And Mitt did a terrific job. For instance, during that time was when the D.C. sniper was wreaking havoc down there. And so Russert got into guns, and Mitt really held his position on protecting the Second Amendment. And I think people liked that. They liked his promise and his plans on how he was going to balance the state budget, what he was going to do.

    And then the question came up about changing the state's law on parental notification for abortion. I think in our state it's 18. ...

    And Shannon O'Brien came out for lowering the age of notification in abortion in that debate. And Mitt opposed it, and that's when he made his promise that, although he's pro-life, that as governor he would keep the laws exactly as they are, not change them the way the Shannon wanted to, or not change them the other way that pro-life people wanted to, that the law would remain the same during his time as governor, which of course he lived up to. ...

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    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    You get Boston politics. You understand the partisanship and the sparring. He'd run a pretty tough campaign against the "Gang of Three" [then-House Speaker Thomas M. Finneran, ex-Senate President Robert E. Travaglini and his Democratic opponent, former Treasurer Shannon O’Brien] he had sort of painted... How do you guide him in terms of how he should deal with the other side?

    Well, the governor is very skillful at dividing campaigning from governing. And of course, in a campaign, it is partisan by its very nature. But governing is different.

    And the governor came to me very early in his term -- I was his communications director -- and he told me that he did not want to engage in any demonizing of the opposite political party. He put a high premium on working across the aisle with Democrats; after all, they controlled 85 percent of the legislature and virtually every statewide office. And the governor knew that if he was going to get anything done, it was going to be done in cooperation with the Democrats in the legislature.

    And one of the practices that he engaged in was to meet on a weekly basis with the Democratic leaders of the House and the Senate. Now, they may not have always had an agenda, but he thought it was important that they get together, even if it was just to eat popcorn and talk about the latest movie that they saw. He put a premium on keeping the doors of communication open, because, as I said, he knew that nothing got done in Massachusetts without the cooperation of the Democrats.

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    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    So he wins the governorship ... bumps immediately into the Democrats who run the House and the Senate, who want to say to him: "Listen, Buster, you don't understand how this works. We run the legislature in this state."

    Actually, the situation was so dire at the beginning, they were able to come together and do some things. Massachusetts operates on a fiscal year that starts July 1 and runs to June 30 of the next year. So Mitt had inherited six months of the previous governor's budget; his budget wouldn't go into effect till July 1. That was the one that had about a $3 billion deficit built in. That's what he was looking at. But he thought he would have the time to be able to figure it out and deal with it.

    Instead, as we're doing the transition, tax revenues are so down that the six months -- he's starting on, I think he was sworn in on Jan. 2 or Jan. 3 -- that six months was already in arrears, already facing a deficit. So he has no time to lose at all, and he has to start figuring out how they're going to start saving, cutting spending without raising taxes. ...

    So he gave a speech in prime time after he had a handle on everything to the people of the state, laying it out, what was going on, and what they needed to do and start doing to get things under control. And the legislative leaders went along with him on a lot of those things. For instance, part of the savings was getting state employees to pay more of their health insurance. I think state employees paid 5 percent and they got it to go to 20, or something like that, which amounted to savings throughout the whole system. And even though the state workers' unions didn't like that, the legislature went along with him.

    So within 30 days, he had to pass a package of savings for that fiscal year they were already in, and then turn around and address the next fiscal year where they were staring down the barrel of the $3 billion deficit on about a $26 billion budget. That's real money. ...

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    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    In terms of the higher levels, in terms of those dealings and meeting with them, that's one thing. What about in terms of dealing with the other legislature? How did that work? He hasn't been described as kind of a backslapper or an arm-twister. How did he interact, or did he have trouble interacting with those people?

    Well, the governor understood that in order to get legislation through the House and the Senate, you needed the support of four key people: the speaker, the Senate president and the chairmen of the Ways and Means Committees, so that's where he concentrated his relationship building. Of course, he was friendly with everybody he met. Those who know the governor know that he's always a gentleman.

    But he knew that the path to passage for any bill was through the speaker's office and the Senate president's office, and of course the Ways and Means Committee. So that's where he concentrated his relationship building.

    But look, the governor came in as an outsider. Four years later he left as an outsider. He was solely interested in getting an agenda passed. He knew that he wasn't going to make a lifetime or a career out of being governor. He came in at a period of time when the state was desperate for strong leadership. He balanced the budget all four years that he was in office, and he turned the economy around. And he also did some good things on the education front, on the infrastructure front that he's proud of.

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    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    Take me to the midterm election. He had worked hard to recruit a number of Republicans to challenge the incumbents. Take me to the moment when it becomes clear that most of them are going to lose. What's that conversation that he has with you?

    Well, the governor undertook an effort two years into his administration to elect more Republicans. If you know Massachusetts, then you know that the game is a little bit lopsided here. This is, after all, the home of [Sen. Ted] Kennedy and [Sen. John] Kerry and [former Gov. Michael] Dukakis. It's practically the capital of the Democratic Party. And the governor is a big believer in achieving a healthy two-party balance, because he believes that competition of ideas and policies is what produces good outcomes.

    So he went to work. He recruited a first-class team of candidates, a lot of them first-time candidates. And just about every one of them lost, not because the governor's argument was weak, I don't think. I think it just goes to show you how infertile the ground here is for the Republican Party -- which makes the governor's election in 2002 that much more remarkable.

    And I think what is interesting about the national ticket this year with Gov. Romney and [Rep.] Paul Ryan [R-Wis.] on it is that you have two people who have represented Democratic constituencies, who have run and won in areas with large numbers of Democratic voters. And that's something rare on a national Republican ticket.

    How pivotal a moment is that when he realizes that this is just how Massachusetts politics is and that he's lost? And how does he take that, especially the personal side of it?

    Well, I think there's no question he ruffled a lot of feathers. But he didn't come into government to be a go-along, get-along person. He believes deeply that a strong two-party balance is what produces the best policy outcomes. So he went to work to level the playing field.

    The fact that we were not successful has less to do with Mitt Romney than it does with the fact that Massachusetts is really infertile ground for the Republican Party.

    Is that a pivotal moment in terms of his decision to put his focus toward the White House? I mean, was that a moment when he realized this is just how it's going to go here, and it's time to move on to something else? Or do you see it differently?

    No, I think he set a political objective that he wanted to achieve. It didn't happen the way we would have liked, but we didn't dwell on it; we just moved ahead.

    By this time, we were beginning to emerge from the recession. We were on a glide path toward fiscal balance and solvency. We had received around this time an upgrade from Standard & Poor's because of our strong fiscal practices. So we were pleased that these things were moving forward. And the governor began to concentrate more on building a healthy condition for the state budget going forward.

    It became very important to him that we put as much money aside in a rainy day fund so that we could protect against a future downturn. That became one of his principal financial objectives. And by the time he left office in 2007, January of that year, the rainy day fund had been built up to over $2 billion.

    And if it were not for the governor's diligence in putting aside that money, things would have been much tougher for Massachusetts over the past four years during this most recent economic downturn.

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    Romneycare

    Tom Stemberg   Founder of Staples, Inc.

    (Text only) Tom Stemberg founded Staples and served as CEO for 16 years. Under Mitt Romney, Bain Capital helped finance the first Staples, which opened in Brighton, Mass. in 1986. Staples was one of Bain’s earliest investments. This is an edited transcript of an interview conducted on June 15, 2012.

    Read the full interview »

    The story of health care now. So the way the story goes, you come to Mitt with an idea, or he asks you, "What would you do?"

    I strongly encouraged Mitt and Ann to have Mitt run for governor of Massachusetts. I really thought the state was in trouble and needed his leadership. Mitt, in fact, comes back, runs for governor and wins, and he asks me to be on his transition team.

    And after one of the meetings, he says, "Why don't you just come by my office?" So I came by his transition office, and we start talking, and he says: "Let me ask just a crazy question. If there are two or three things I should do as governor that make a difference, what do you think they should be?"

    And the first, I says: "Mitt, you should blow up Logan Airport and start all over again. That place is a mess." He said, "We're not going to do that." "OK," I said. "And the second thing I would do, I would provide health care to everyone in this state. The uninsured are creating a crazy burden on our system. They're going to emergency rooms. It's the most expensive form of health care. The hospitals through insurance companies end up getting paid for it anyhow. It just ought to be made more efficient, and you can't do that unless you get everybody covered."

    He listened politely and mumbled something about, "Gee, that would be very difficult to do." And that was the end of it. I never thought I'd hear from him again, until a little over a year later -- it may have been longer -- the phone rings. It's Mitt, and he says: "Hey, Tom, remember that idea about health care? We're going to go with it."

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    Romneycare

    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    I want to talk about health care. ... By all accounts, Gov. Romney receives the data and the analysis and he looks at all of it and he decides that the individual mandate is critical. ... Take me into those meetings and help me understand how he came to those decisions.

    Well, I think the governor decided to turn his attention to health care following a conversation he had with a friend and supporter, Tom Stemberg, from the Staples company. And Tom told him in a private meeting, "Mitt, if you really want to help people, you'll find a way to get more of them covered by insurance." So the governor took that as a challenge and decided to dive into the issue of health care.

    In Massachusetts, we're fortunate in that most of our residents already have insurance through their employer, but there was still that stubborn 7 or 8 percent of the population that was uninsured, some by choice. So the governor began to consider how can we, using existing resources, not by raising taxes or by imposing a mandate on employers to cover people, how can we find a way to bridge that gap and finally get everybody covered by health insurance, again, using money that is already in the system?

    So he came up with his health care reform. It worked for Massachusetts. Certainly wasn't designed to be a national plan. In fact, the governor said very early on in this debate that what we did here in Massachusetts works for the people of Massachusetts, but our insurance market is different than Texas, Oklahoma, California. And each state under our federalist system should be free to pursue their own solutions.

    But he's proud of what he got done in Massachusetts. The people of Massachusetts like what we did here. And unlike the federal plan that Barack Obama put in place, it did not require a tax increase, and it did not require us to cut care to seniors.

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    Romneycare

    Jonathan Gruber   Helped develop Romney and Obama health care plans

    A professor of economics at MIT, Gruber specializes in health care. He was involved in the development of Mitt Romney's Massachusetts health care plan -- aka "Romneycare" -- as well as the Affordable Care Act, or "Obamacare." This is the edited transcript of an interview conducted by producer Michael Kirk on June 13, 2012.

    What brings him to this moment where he's prepared in any way to look at it, to think about it, consider it, take it on? Because it doesn't seem like the kind of thing a CEO-style governor would embrace or mount as an issue to take on.

    Actually, that's wrong. I mean, what really appeals to him as a CEO-style governor was that the pieces were aligned to make this work. And the pieces were the following: First of all, we had a relatively low uninsurance rate, so it would not be as expensive to cover the uninsured as in other states.

    Second of all, we had already done one of the hardest steps, which is we reformed our insurance market to not allow insurers to discriminate against the sick. Now, we had done that doing nothing else, and the result was we had destroyed our insurance market, and we can come back to that. That's why you need a mandate. But in some sense we had already taken that step. But as a result we had this sort of destroyed insurance market.

    Third, we had a major source of financing in place, which we had formerly had a pretty powerful senator named Ted Kennedy who had been delivering about $400 million a year in slush funds to our safety-net hospitals that the Bush administration was threatening to take away.

    The Romney administration, to their credit, went to Washington and said, "Can we keep this money if we use it to cover the uninsured?" And the Bush administration, to their credit, said yes.

    So those pieces pulled together made a really interesting opportunity to actually cover the uninsured and fix a broken, non-group market on the federal dime. And that was a really unique opportunity, which I think Romney as a kind of management consultant was excited to take advantage of. ...

    And how do you get to the game, Jonathan?

    Well, how does a nerd get in a game like this? Through numbers. Basically what happened was I was hired by the state. In the year 2000, we had this crazy thing called the surplus. You may not have heard of this term recently. And so the federal government actually gave grants to states -- and states were in good fiscal shape as well -- gave grants to states to try to figure out how to expand health insurance coverage.

    The state came to me and asked me to build a model to help understand how alternative ways of expanding health insurance coverage might work, what it might cost the state, etc. And I did that.

    By the time the model was done in 2001, we were already in the tank fiscally, both the nation and as a state. And I sort of did this report that went nowhere.

    Then in 2003, 2004 -- I don't remember exactly when -- I got a call back from Amy Lischko, the woman who hired me to do this report, who ran the policy shop in the Romney administration, saying: "Hey, look! The governor is thinking seriously about doing major health care reform. You've got this model already in place to help understand with Massachusetts. We want to bring you onboard and have you help us figure out if this going to work financially, how many people we're going to cover, what's going to work." So I was sort of the numbers guy.

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    Romneycare

    Jonathan Gruber   Helped develop Romney and Obama health care plans

    A professor of economics at MIT, Gruber specializes in health care. He was involved in the development of Mitt Romney's Massachusetts health care plan -- aka "Romneycare" -- as well as the Affordable Care Act, or "Obamacare." This is the edited transcript of an interview conducted by producer Michael Kirk on June 13, 2012.

    We've heard that he is also a numbers guy, loves them, needs them. They are his life blood. Was he?

    I don't know. You know, once again, I was only in one two-hour meeting with Mitt Romney, so I don't claim to know him well.

    What I saw in that meeting was someone who really felt strongly about the moral case for ending this free-rider problem, someone who really felt strongly of: "Look, there are all these free riders. If we bring them into the system, we can both get them to contribute and lower insurance prices because they are healthy. And we've got this federal money. This seems like a good thing we should make work."

    My job was just to see if the numbers added up, and I think he was excited they did. And in particular, I like to think that I contributed to the case for the mandate. I think he felt strongly the moral case for the mandate. I think I sort of provided the financial case for the mandate, which was to say to him two things: First of all, we can't get to universal coverage or even close to it without a mandate. And second, actually coverage becomes much more efficient with a mandate. To show him that if he did the plan he was considering with no mandate, it costs two-thirds as much as doing it with a mandate but only covered one-third as many people, and that's because the healthy stayed out, and the healthy are cheap.

    So I think that sort of fed into his notion of kind of, "Gee, this is a kind of efficient way to cover the uninsured."

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    Romneycare

    Jonathan Gruber   Helped develop Romney and Obama health care plans

    A professor of economics at MIT, Gruber specializes in health care. He was involved in the development of Mitt Romney's Massachusetts health care plan -- aka "Romneycare" -- as well as the Affordable Care Act, or "Obamacare." This is the edited transcript of an interview conducted by producer Michael Kirk on June 13, 2012.

    OK. Let's define mandate.

    The mandate was the requirement that people have to buy health insurance.

    You mean, you've got to do it.

    You've got to do it or pay a penalty.

    And that's a big idea.

    That's a big idea that really grew out of leading conservative thinkers in the early '90s as an alternative to the employer mandate. So the term "mandate" traditionally applied to employers, the notion of requiring employers to offer health insurance. As a conservative alternative to that idea in the early 1990s, Stuart Butler, who is at the American Enterprise Institute, a conservative think tank, and Mark Pauly, who was an academic at Wharton and sort of a conservative health economist, separately and together developed this idea of wouldn't it make more sense to have an individual mandate, to require individuals to take the responsibility for their own health insurance coverage?

    This is a very conservative idea: Let's put the onus on individuals, responsibility. And it grew out of that.

    It briefly was popular in the early '90s and then was kind of something in the background. But it has always stayed around as this sort of this conservative notion of here is the right way to do health care reform.

    And that, of course, presumably would appeal to a Republican governor.

    Oh, it did. It absolutely did. I mean, it was the way -- it tied in directly with his aversion, his free-rider problem. I mean, he said, "Look, we've got --"

    So basically, when I think of what Romneycare was, I like to think of it as a three-legged stool. The first leg is reforming insurance markets, ending the ability of insurers to discriminate against the sick. As I said, we had already done that in Massachusetts. We are one of seven states that tried that in the 1990s. In every state, the same thing happened, exactly what an economist would have predicted -- total disaster, because if you tell insurance companies you can't charge the sick more than the healthy, but you tell people you can buy insurance whenever you want, the insurance companies say: "Wait a second. People aren't going to buy it until they are sick, and I'm going to have to charge a high price." When the price is high, the healthy don't buy, and it becomes a self-fulfilling prophecy.

    And in Massachusetts, the typical individual health insurance policy in 2006 cost about $8,000 a year, and the typical person buying it was about 55 years old. Basically, the market was broken.

    So that's why you need the second leg of the stool, which was the individual mandate, the requirement that people come in and buy health insurance. What that does is by bringing healthy people into the pool, it fixes that problem, brings the prices down. And that was the second leg of the stool. It both had the sort of moral component that Romney seemed very interested in and kind of ending this free-rider problem and the financial component of fixing this broken market by bringing healthy people in and by bringing the price down.

    But you can't have the mandate without the third leg of the stool, which is subsidies. At the time we are considering this, a family health insurance policy in Massachusetts cost about $12,000 a year. The poverty line for a family is about $22,000. You couldn't tell a family making $22,000 you have to spend $12,000 for insurance. That is both inhumane and impolitic. So the third leg of the stool was subsidies, to make health insurance affordable for low-income families. And that three-legged stool became Romneycare.

    And the subsidies came from?

    The subsidies came from rededicating money the feds were already giving us to pay for the uninsured. So it was a neat rededicating of funds so we didn't have to raise taxes. That was sort of another thing in my modeling, was that basically Romney had figured out that for about $700, by rededicating money we're already spending and taking money from the federal government, we could spend about $750 million. And my goal was to say could we do it for $750 million. And my model said we could.

    I'm proud to say when the final bill came in it was about $750 million. I'm pretty pleased that worked out.

  16. Ψ Share
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    Romneycare

    Jonathan Gruber   Helped develop Romney and Obama health care plans

    A professor of economics at MIT, Gruber specializes in health care. He was involved in the development of Mitt Romney's Massachusetts health care plan -- aka "Romneycare" -- as well as the Affordable Care Act, or "Obamacare." This is the edited transcript of an interview conducted by producer Michael Kirk on June 13, 2012.

    So when Romney hears that you've got this model that verifies that "Hey, this is a good idea," and you say it at the meeting, what's he like when he hears it?

    Like a real wonk, just very excited: "Wow! Isn't this cool? We can cover the uninsured. We don't have to raise taxes. We can end the free-rider problem. Isn't this neat?" So that's why I sort of reacted negatively to your idea that it didn't seem like a CEO thing. I don't know about CEO, but he was very much in management consultant mode, like: "Here is a problem. I can solve it. Isn't that neat?" -- sort of engineering almost mode.

    Engineering in what sense?

    Just in a sense of kind of, you know -- I teach at an engineering institute -- in the sense of kind of, that's what engineers do. They are faced with constraints; they try to solve a problem. He seemed excited that faced with the constraints he was facing, he could solve this problem.

    So you could imagine him sitting at Bain & Company and under other circumstances. This was not unfamiliar territory to him.

    Not at all.

    One of those guys who just --

    Exactly.

    -- runs his hand down the thing and says, "Argh, I like that."

    You know, I was very impressed. I came out of that meeting. I went home and told my wife and said: "As a Democrat, I'm very scared. This guy could be president." He was really very smart, well-spoken, and just really seemed to know his stuff and was very impressive in person.

    Did they have good people around the table?

    That's what was very interesting. His financial people were wonderful. Tim Murphy is really the guy you should be talking to, sort of one of the unsung heroes of this. He was his main point person to make this happen. Amy Lischko -- I worked with terrific people.

    His political people were actually opposed. I mean, basically the meeting largely consisted of him arguing with his political advisers. His political adviser was saying, "We don't think this is such a smart thing to do," and Romney is saying: "No. Check it out. I can do this. Isn't this neat? I can make this work."

    So actually, I was not that impressed with his political advisers because I didn't like what they were saying, but he sort of shot them down.

    You keep saying this was "neat." Did he actually use the words, "This was neat"?

    I don't remember. No. But that was sort of -- he had a bit of a "Gee, golly gee" attitude about [it]. "Isn't this cool? We can make this work." ...

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    Romneycare

    Jonathan Gruber   Helped develop Romney and Obama health care plans

    A professor of economics at MIT, Gruber specializes in health care. He was involved in the development of Mitt Romney's Massachusetts health care plan -- aka "Romneycare" -- as well as the Affordable Care Act, or "Obamacare." This is the edited transcript of an interview conducted by producer Michael Kirk on June 13, 2012.

    There is a big moment where the bill is signed. Take me there. Describe the environment. I know you were there.

    I was there. I was very excited. I got to bring my wife. That was really neat. I was one of several people Romney actually thanked in his speech, which was really cool, a very proud moment for my wife. That was very exciting. It was this big podium and was all -- Ted Kennedy made a joke about hell freezes over. "I thought hell would freeze over before I would work with Mitt Romney." And Mitt Romney said, "I can't believe I'm working with Ted Kennedy." And they all laughed and hugged. And then they had a speaker from the conservative Heritage Foundation, which is a very conservative think tank, speak about what a wonderful validation of conservative principles this was. And it was all wonderful. And everyone was super-happy.

    Daniel Webster looked down upon it all.

    It was great. It was just an absolutely thrilling moment.

    And the meaning of it? Suddenly does the word spread around the United States in California and other places that, "Hey, something cooked in Massachusetts. Maybe it could work here"?

    Oh, absolutely. I mean, it sort of had the feel of "Nixon goes to China" moment, like here is a Republican governor working with a Democratic legislature to have this bipartisan, middle-of-the-road solution. And almost immediately I was called by Gov. [Arnold] Schwarzenegger's office in California. I spent the next year trying to do the same plan in California that just flounders on fiscal straits and political straits in California. But once again, Schwarzenegger thinking, "I'm sort of a middle-of-the-road Republican; I can do the same thing here."

    And I worked with a number of other states. People were very excited about this idea. But pretty quickly states came to realize that without the leg up Massachusetts had of this federal money, this huge federal slush fund that we had, without that leg up it wasn't going to happen. Then a number of states were interested. They were excited about elements, but they said, "Look, we just can't afford this," just like Massachusetts wouldn't have been able to afford it on our own.

    I think there was a lot of excitement and interest, but it just wasn't going to work fiscally without more federal support. ...

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    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    ... When did you start thinking that this man may have a chance to be president?

    It's no big deal for us here in Massachusetts to have politicians, political leaders that get involved in national presidential politics. I mean, you just think back to JFK, of course, in 1960. ... So it's no big deal to us here, but I never really thought about it, and I never really had any discussions with Mitt about it. But halfway through his term -- we have legislative elections every two years, and the governor serves for four.

    So at the midterm of Mitt's term, he thought it would be great to get some competition into the legislature, and he made a big effort to go out and recruit candidates to challenge Democrats all over the state. He recruited over 100 candidates, and these were amazing people, people I had never seen run for the legislature before in all my, you know -- retired businessmen, doctors, educators, all kinds of folks that said, "Hey, I'll step up and go for it."

    And of course, 2004 was also the year that [Sen.] John Kerry, from our state, was the Democratic nominee for president, and the Democrats decided to do voter maximization that year and really drive up their vote in Massachusetts to try to add on to Kerry's national total. So our candidates got wiped out. Not one of those good candidates, all good people, most running for the first time, all lost. ...

    So after that night and going into now the second part of his term as governor, there were a lot of Democrats there in the legislature that said: "I'm not giving him anything. Screw him. We won. He tried to take me on; now he's going to pay." And there were some bad feelings there. And I think that's when he first started to think, OK, I'm not going to be governor another term. I don't want to run again. What else is out there?

    And we all knew President Bush was coming up to the end of his term. There were some great candidates thinking about running. But I think that's when he first started to think about throwing his hat in the ring. ...

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    His Change of Heart on Abortion

    Eric Fehrnstrom   Romney political adviser

    Eric Fehrnstrom has worked for Romney for a decade, first as his press secretary in Romney’s 2002 run for governor of Massachusetts. Prior to his work in politics, Fehrnstrom worked in public relations and as a reporter for the Boston Herald. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum on Aug. 21, 2012.

    There's also a big difference between running as a Republican in Massachusetts and running for the Republican nomination on a national stage. ... As his adviser, what were you counseling, and how did those conversations take place?

    Well, look, you talk about his position. Really, [there was] one significant issue that Mitt had a change of heart on, and that was abortion. And when he ran in 2002 for governor, he told the people of Massachusetts that he was personally pro-life, but he wanted to make a deal with them, and the deal was that he would not make any changes to the abortion laws of the commonwealth. And that's a pledge that he kept all four years of his term.

    But he also had to confront issues, like the stem cell debate and the subject of cloning human life. And confronted with these issues, Mitt Romney wrote an editorial for The Boston Globe back in 2007, and he laid out what his views were on the subject of life, and he concluded that he was firmly pro-life. Now, that happened some years ago now, but that was the one significant issue that he had a change of heart on.

    But Mitt Romney was running based on his professional résumé, as a person who could fix things that were broken. He did it in private business; he did it at the Olympics; he did it for the commonwealth of Massachusetts.

    And I think what's interesting about Mitt is that in every enterprise that he's been involved in, the stakeholders have benefited from his leadership. The stakeholders at Bain, of course, would have been the investors who saw high rates of return from the investments that Mitt Romney led. The stakeholders at the Olympics would be, well, all the members of the Olympic movement who had a stake in seeing those Games turned around and staged successfully, and they were. And then, of course, the stakeholders in his governorship were the people of Massachusetts, who saw him turn around a bad state economy.

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    Douglas Gross   Iowa chairman, Romney 2008

    (Text only) Douglas Gross is a lawyer in Des Moines who has worked on numerous campaigns and held a variety of positions in state government. Prior to his work for Romney, he was a fundraiser for George W. Bush. This is an edited transcript of an interview conducted on August 28, 2012.

    Read the full interview »

    ... We didn't touch on the Massachusetts [question]. What was the issue that you saw there?

    The issue there -- and this is probably more acute for Iowa than it is in a general election right now -- is he was a governor of Massachusetts, was the most liberal state in the country.

    He had adopted a health care reform package that I frankly thought was interesting and reflective of a particular solution they needed in Massachusetts and reflected some really innovative policymaking on his part. It also reflected the kind of governor he was and president he could be in terms of looking at things in a pragmatic way, devising solutions that made sense for that particular point in time in that institution.

    But nevertheless, if you come into Iowa with a government-mandated health care program, come from Massachusetts, which is the most liberal state in the country, you start with a couple of strikes against you.

    And trying to convince people that you're really one of them, particularly folks who in their caucuses are generally more conservative than the general electorate, that was an issue for him throughout the entire primary campaign, an issue for him today still with the base that I think he attempted to resolve, and I think effectively resolved, by picking Paul Ryan as his vice presidential candidate.

    So I think he solved the Massachusetts issue. I think he's solving the Mormonism issue. I mean, for the first time, he now lets the media go along with him when he's going to a Mormon church, so he's no longer trying to put his Mormonism under a bushel basket. He's showing that his Mormonism is reflective of the values that he brings to life, which I think are outstanding. It's the middle M that he still seems to have the difficulty with.

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    Douglas Gross   Iowa chairman, Romney 2008

    (Text only) Douglas Gross is a lawyer in Des Moines who has worked on numerous campaigns and held a variety of positions in state government. Prior to his work for Romney, he was a fundraiser for George W. Bush. This is an edited transcript of an interview conducted on August 28, 2012.

    Read the full interview »

    ... Do you think he's more of the Massachusetts moderate, or the more sort of conservative candidate?

    I think at his core he's conservative. On economic issues, he's very conservative. And I think Mike Murphy was right when he said that Mitt had to modify some of his positions to become governor of Massachusetts. So I think some people will be surprised, if and when he becomes president, that he'll govern as a conservative president, particularly on economic issues.

    On social issues, I don't see Mitt Romney wanting to engage on that. I think he learned that lesson, that engaging on those social issues is not productive if you want to move the American people to solve the problems that need to be solved right now by our government.

    The social issues certainly need to be addressed. I suspect Mitt believes that they can be addressed most effectively by our churches and our private institutions, and he would encourage that. But you should expect, on economic issues, a very conservative president.

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